diff --git a/Kconfig.zephyr b/Kconfig.zephyr
index 4f754c367b..0ee32ee9db 100644
--- a/Kconfig.zephyr
+++ b/Kconfig.zephyr
@@ -30,6 +30,8 @@ source "net/Kconfig"
 
 source "misc/Kconfig"
 
+source "lib/Kconfig"
+
 #
 # The following are for Kconfig files for default values only.
 # These should be parsed at the end.
diff --git a/Makefile b/Makefile
index e22ef9c4af..7cd03ca2dd 100644
--- a/Makefile
+++ b/Makefile
@@ -557,12 +557,7 @@ else
 include/config/auto.conf: ;
 endif # $(dot-config)
 
-ifdef CONFIG_TINYCRYPT
-# Objects we will link into the kernel / subdirs we need to visit
-KCRYPTO_DIR := lib/crypto/tinycrypt
-libs-y += $(KCRYPTO_DIR)/
- ZEPHYRINCLUDE += -I$(srctree)/lib/crypto/tinycrypt/include
-endif
+-include $(srctree)/lib/Makefile
 
 ARCH = $(subst $(DQUOTE),,$(CONFIG_ARCH))
 export ARCH
diff --git a/lib/Kbuild b/lib/Kbuild
new file mode 100644
index 0000000000..7245720096
--- /dev/null
+++ b/lib/Kbuild
@@ -0,0 +1,2 @@
+obj-y += libc/
+obj-y += crypto/
diff --git a/lib/crypto/Kconfig b/lib/Kconfig
similarity index 83%
rename from lib/crypto/Kconfig
rename to lib/Kconfig
index aac98e676a..088fbf4b06 100644
--- a/lib/crypto/Kconfig
+++ b/lib/Kconfig
@@ -1,7 +1,5 @@
-# Kconfig - cryptography configuration options
-
 #
-# Copyright (c) 2015 Intel Corporation
+# Copyright (c) 2016 Intel Corporation
 #
 # Licensed under the Apache License, Version 2.0 (the "License");
 # you may not use this file except in compliance with the License.
@@ -16,8 +14,8 @@
 # limitations under the License.
 #
 
+
 menu "Cryptography"
-
-source "tinycrypt/Kconfig"
-
+source "lib/crypto/tinycrypt/Kconfig"
 endmenu
+
diff --git a/lib/Makefile b/lib/Makefile
index 7a484c417c..11a2853564 100644
--- a/lib/Makefile
+++ b/lib/Makefile
@@ -1 +1,4 @@
-obj-y := libc/
+
+ifeq ($(CONFIG_TINYCRYPT),y)
+ZEPHYRINCLUDE += -I$(srctree)/lib/crypto/tinycrypt/include
+endif
diff --git a/lib/crypto/Makefile b/lib/crypto/Makefile
index b25ada5eb6..f51a9e6ca5 100644
--- a/lib/crypto/Makefile
+++ b/lib/crypto/Makefile
@@ -1 +1 @@
-libs-$(CONFIG_TINYCRYPT) += tinycrypt/
+obj-$(CONFIG_TINYCRYPT) += tinycrypt/
diff --git a/lib/crypto/tinycrypt/Makefile b/lib/crypto/tinycrypt/Makefile
index c4a5a7a1ca..1ffccdc9ee 100644
--- a/lib/crypto/tinycrypt/Makefile
+++ b/lib/crypto/tinycrypt/Makefile
@@ -1,14 +1,15 @@
-ccflags-y +=-I$(srctree)/lib/crypto/tinycrypt/include
-lib-$(CONFIG_TINYCRYPT) := source/utils.o
-lib-$(CONFIG_TINYCRYPT_ECC_DH) += source/ecc_dh.o source/ecc.o
-lib-$(CONFIG_TINYCRYPT_ECC_DSA) += source/ecc_dsa.o source/ecc.o
-lib-$(CONFIG_TINYCRYPT_AES) += source/aes_decrypt.o
-lib-$(CONFIG_TINYCRYPT_AES) += source/aes_encrypt.o
-lib-$(CONFIG_TINYCRYPT_AES_CBC) += source/cbc_mode.o
-lib-$(CONFIG_TINYCRYPT_AES_CTR) += source/ctr_mode.o
-lib-$(CONFIG_TINYCRYPT_AES_CCM) += source/ccm_mode.o
-lib-$(CONFIG_TINYCRYPT_AES_CMAC) += source/cmac_mode.o
-lib-$(CONFIG_TINYCRYPT_SHA256) += source/sha256.o
-lib-$(CONFIG_TINYCRYPT_SHA256) += source/utils.o
-lib-$(CONFIG_TINYCRYPT_SHA256_HMAC) += source/hmac.o
-lib-$(CONFIG_TINYCRYPT_SHA256_HMAC_PRNG) += source/hmac_prng.o
+subdir-ccflags-y +=-I$(srctree)/lib/crypto/tinycrypt/include
+
+obj-$(CONFIG_TINYCRYPT) := source/utils.o
+obj-$(CONFIG_TINYCRYPT_ECC_DH) += source/ecc_dh.o source/ecc.o
+obj-$(CONFIG_TINYCRYPT_ECC_DSA) += source/ecc_dsa.o source/ecc.o
+obj-$(CONFIG_TINYCRYPT_AES) += source/aes_decrypt.o
+obj-$(CONFIG_TINYCRYPT_AES) += source/aes_encrypt.o
+obj-$(CONFIG_TINYCRYPT_AES_CBC) += source/cbc_mode.o
+obj-$(CONFIG_TINYCRYPT_AES_CTR) += source/ctr_mode.o
+obj-$(CONFIG_TINYCRYPT_AES_CCM) += source/ccm_mode.o
+obj-$(CONFIG_TINYCRYPT_AES_CMAC) += source/cmac_mode.o
+obj-$(CONFIG_TINYCRYPT_SHA256) += source/sha256.o
+obj-$(CONFIG_TINYCRYPT_SHA256) += source/utils.o
+obj-$(CONFIG_TINYCRYPT_SHA256_HMAC) += source/hmac.o
+obj-$(CONFIG_TINYCRYPT_SHA256_HMAC_PRNG) += source/hmac_prng.o
diff --git a/misc/Kconfig b/misc/Kconfig
index 92aed0b4fe..5cecbbc98b 100644
--- a/misc/Kconfig
+++ b/misc/Kconfig
@@ -16,11 +16,6 @@
 # limitations under the License.
 #
 
-
-menu "Cryptography"
-source "lib/crypto/tinycrypt/Kconfig"
-endmenu
-
 menu "Compile and Link Features"
 
 config  KERNEL_BIN_NAME